Entrepreneurs Society, Newcastle University
The days of ‘brick and mortar’ stores are numbered, but what will be its replacement?
When we speak of Ocado, we picture an online grocery company, and not a revolutionary one. It could be argued now that Ocado is now more of a tech start-up than an online grocery company, as it’s been investing in technology for years, and it could be about to revolutionise every area of e-commerce.
The result of their investment? An operating platform that fulfils 65,000 orders a week using a 3-D grid system, a ‘hive’ of washing-machine sized robots which fly around their Customer Fulfilment Centre (CFC) at a superspeed to assemble orders. There are 700 of these robots and they’re all co-ordinated by an air-traffic control system which instructs all their movements around the CFC, which is the size of three football pitches. This efficiency and removal of human error may create the first highly profitable online grocery shopping business in an industry that has struggled developed since its creation.
So, what’s the true impact?
In May of this year, Ocado licenced its technology to Kroger, American’s biggest supermarket chain. This will create 20 new CFC’s across America. The technology is similar to Amazon’s Warehouse robots, but Ocado is paving the way by selling on the technology to perform operations at this scale, whereas Amazon has been very closed off about its abilities, which has made them highly successful in recent years but has limited applications of applying these advancements elsewhere.
With this move from Ocado, it’s likely we’ll see technology on this level in different industries around the world. But as online shopping continues taking over from the traditional ‘brick and mortar’ stores, will we ever reach a stage where all our online orders are fulfilled in this way?
Economically, it is far cheaper to direct machines to do the work instead of employing humans to do so. Machines make fewer mistakes, aren’t legally required to take time off (all downtime for repairs on machines are usually planned), and most importantly don’t include emotion in decisions (not yet anyway...).
The day where machines take over from all humans in factories is nearing, and it is likely to be the highly complex jobs in factories that will remain the longest. The resistance to these changes will also play a factor in the adoption of the technology and may be the most successful factor in delaying the change. I use the word delaying there because I believe the switch to robots in factories is inevitable, and it is likely to be the generation of workers after us that will see jobs disappear to our robotic peers.